John Deaton Promises XRP Investors To Hold SEC Accountable For $15 Billion Loss

Pro-XRP lawyer John Deaton has promised to hold the US Securities and Exchange Commission (SEC) accountable for the $15 billion loss that XRP investors suffered due to the SEC’s Ripple lawsuit. The legal expert, who is contesting against Senator Elizabeth Warren, famous for her anti-crypto stance, intends to fulfill this promise when he gets elected to the Senate. The lawyer has already outlined how he plans to hold the Commission accountable.

John Deaton Promises To Hold The SEC Accountable

In an X post, the pro-XRP lawyer promised to hold the SEC accountable for the 75,000 small XRP investors he represented in the SEC’s case against Ripple. Specifically, the lawyer claimed these small investors lost over $15 billion thanks to the “SEC’s misconduct and gross overreach.” The legal expert added that he isn’t willing to accept an apology from the Commission. Instead, he plans to hold people at the SEC accountable when he gets to the Senate since Senator Warren won’t do it.

The Senatorial candidate highlighted how the federal court declared that the Commission’s lawyers lacked “faithful allegiance to the law” and were only concerned about winning the suit against Ripple rather than protecting investors, which they are mandated to do. The lawyer also noted how he fought to protect these XRP holders and did it for free.

John Deaton acted as amicus counsel for these investors, considering their interest in the Ripple lawsuit. The lawsuit is believed to have stifled XRP’s price, especially when it was instituted in 2020, just around the time of the 2021 bull market, preventing these investors from enjoying their desired profits from the crypto.

In trying to protect these investors in the early stages of the Ripple lawsuit, John Deaton revealed that he had filed a Writ of Mandamus against the SEC, stating that the Commission had violated 75 years of legal precedent by claiming that XRP was a security. He argued that the underlying asset could not have been a security even if it was sold as an investment contract.

The court eventually adopted Deaton’s reasoning as Judge Analisa Torres gave a landmark ruling in the case in 2023 that XRP wasn’t a security in itself, even if Ripple’s XRP sales were investment contracts.

Senator Warren Failed To Act In The Ripple Case

John Deaton also revealed that Senator Warren failed to act in the case despite 627 XRP holders he represented living in Massachusetts, the area she represents in the Senate. The lawyer added that he specifically reached out to Warren back then because she was also a member of the banking committee overseeing the SEC. However, she did nothing despite his calls for her to act. Warren and SEC chair Gary Gensler have earned a reputation for their public anti-crypto stance. As such, her failure to defend these token holders might not surprise many.

As part of his efforts to hold the Commission accountable, Deaton unveiled two bills he intends to push when he gets to the Senate. The first would focus on exposing regulatory capture within the SEC. Meanwhile, the second bill will propose that a 3-5 year statutory bar should be placed on preventing regulators from working in an industry that was under their purview in their regulatory capacity.

The SEC Regrets Classifying Tokens As Securities

In its proposed amended complaint (PAC) against Binance, the SEC said it regrets any confusion its classification of tokens as securities may have caused. The Commission reiterated that the term “crypto-assets securities,” which it commonly uses, didn’t refer to the crypto asset itself. Instead, they meant that these assets could be the subject of an investment contract.

This suggests that the Commission has admitted to its mistake in classifying XRP as a security, which led to the long-running lawsuit. This reasoning in the PAC is also in line with Judge Torres’ ruling that Ripple’s XRP institutional sales were investment contracts but that the token wasn’t a security in itself.